Organic ranchers eye Amazon distribution ahead of Whole Foods deal

Amazon.com Inc plans to meet on Wednesday with a dozen U.S. ranchers, seeking to expand distribution of organic and grass-fed meats as it takes over Whole Foods Market Inc, according to the meeting’s organizer.

Analysts and investors have speculated that Amazon is aiming to combine its expertise in order fulfillment with the grocer’s facilities to build out delivery of fresh food, but the online retailer has not yet detailed its plans.

The retailer later asked the farmer to invite other U.S. livestock producers to discuss distribution of organic and grass-fed meat, Harris said.

Amazon declined to comment.

“We are excited about exploring possibilities with them,” Harris said. “It suggests that this niche in the market is becoming mainstream enough that they feel their delivery system might have traction with it.”

Amazon’s expansion in organic products through Whole Foods bodes well for the sector, said Nate Lewis, farm policy director at OTA.

“If Amazon can apply its efficiencies of scale to the Whole Foods Market segment, and pass along those savings (to consumers), I would not be surprised to see more growth in the protein side,” Lewis said.

But some organic farmers worry that Whole Foods under Amazon might import meat from lower-cost producers rather than buy U.S. supplies.

“It could be as bad as shutting us out or as good as expanding the market,” said Mark Smith, whose Aspen Island Ranch is not involved in the meeting. Smith’s ranch is part of a Montana co-operative that sells organic grass-fed beef to Whole Foods through a third party.